Africa is aiming to raise its installed power generation capacity by 250 GW by 2030. Liquefied natural gas (LNG) can serve as a baseload energy source and gas-powered generation assets can be built modularly and scaled up as use increases, says modular infrastructure, engineering services and gas logistics multinational AG&P LNG global business development manager Nishant Sharma.
AG&P’s assessments of the region have identified the potential for LNG to become one of the key baseload energy sources on the continent, specifically because its use is flexible, can be scaled up to meet growing demands and many existing generation assets can be converted to run on LNG.
LNG is significantly less carbon-intensive and less polluting than other fossil fuels and is well suited to the heterogeneous and decentralised generation and transmission landscape emerging in Africa.
“Demand is increasing in Africa, but is not centralised. This necessitates a holistic approach with efficient gas logistics and supply chains that are designed to serve smaller, scattered and remote demand centres cost-effectively.”
The current gas supply chain relies on existing export and gas-handling capacity that oil- and gas-producing countries in Africa have, particularly Angola and Nigeria. Similar infrastructure is under construction for potential producers Mozambique and Tanzania.
Scalable infrastructure and the lower capital costs associated with smaller-scale infrastructure projects provide a prudent method of augmenting capacity and developing power generation infrastructure, adds Sharma.
AG&P’s view is that offshore regasification terminals, together with existing oil and gas distribution supply chains, can provide a secure supply of gas for most regions, and is particularly well suited to provide reliable power for the industrial power, utility power and transport sectors.
“There are [only] a few pipelines in underserved regions because construction is economically unfeasible, unless volumes increase significantly. This has left many regions without access to gas supply. There is an opportunity for the private sector to play a role in developing scalable infrastructure to support private, self-use generation and public or utility power generation, thereby providing affordable access and increasing gas within the energy mix.”
However, Sharma points out that a necessary component for an effective gas market is for regulators to manage gas pricing and sales with due regard for international and local pricing pressures. Therefore, regulation and cooperation between private companies and public institutions are necessary for the development of the LNG market across Africa.
There are significant gas plays in Africa and long-term potential for the local production and consumption of LNG, which will also benefit from the surety afforded by stable policy and regulations, he adds.
“Mozambique stands to become one of the five largest gas exporters by about 2023 and join other major African energy exporting nations,” concludes Sharma.